EU action plan confirms melted/poured, CBAM, scrap focus
The European Commission published its Steel and Metals Action Plan on Wednesday, confirming it is evaluating the “melted and poured” rule, adjustments to the Carbon Border Adjustment Mechanism (CBAM) and a scrap export duty.
However, its wording on various points softened compared with the Plan draft leaked earlier in the week, Kallanish notes.
European steelmakers association Eurofer praised the Commission’s proposals but warns that “energy remains the elephant in the room” and that “further work to reduce energy costs is crucial”.
The final Plan states the Commission “will assess whether it should adapt its practice by introducing a ‘melted and poured rule’.” This compares to the draft, which stated the Commission has already decided to implement the rule in its trade defence measures. No schedule has been provided for the assessment process.
The Commission says it will “consider proposing”, by the third quarter at the latest, export fees or export duties, “if necessary”, to ensure sufficient availability of scrap in the EU. It will also assess introducing a reciprocity rule to countries that ban scrap exports to the EU or apply unfair subsidies to support their metal recycling industries.
The draft language was firmer, indicating the Commission would propose a reciprocation measure by Q3.
The Commission’s CBAM adjustments proposed in the draft have all made the cut. The difference is the timing for one of them. The Commission will issue in Q2 a communication providing analysis and options on how to address the problem of carbon leakage for CBAM goods exported from the EU to third countries.
The Commission also confirms it will strengthen the monitoring of trade flows and will proactively open investigations based on a “threat of injury”, without waiting for material injury to occur.
On energy, in the short term, the Commission is encouraging member states to use existing regulation that allows for reduction of environmental taxes and parafiscal levies, and reduction of electricity levies. The Energy Taxation Directive allows to decrease electricity taxation to zero for energy intensive industries.
The Commission is consulting member states on a clean flexibility state aid instrument based on PPAs and industry committing to consume clean electricity. It will also provide guidance to member states on the design of public support schemes for clean energy through two-way contracts for difference. This will provide temporary price relief to enable decarbonisation investments, the Commission points out.
On lead markets for steel, as announced in the Clean Industrial Deal, the Commission will propose as part of the Industrial Decarbonisation Accelerator Act to introduce resilience and sustainability criteria to foster clean European supply for energy-intensive sectors. These criteria – for example, clean, resilient, circular, cybersecure – will strengthen demand for EU-made clean products.
Finally, the Commission made the link between steel and defence, saying the former is “crucial” to guaranteeing the EU’s security and delivering on the ReArm Europe Plan/Readiness 2030 programme, also launched on Wednesday.
Adam Smith Poland
European Commission unveiled the Steel and Metals Action Plan
Today, the European Commission unveiled its Steel and Metals Action Plan, aimed at securing the competitiveness, resilience, and decarbonization of Europe’s steel and metals industries. This initiative addresses global trade pressures, high energy costs, and the need for sustainability investments, reinforcing the sector’s strategic importance to automotive, clean tech, and defense industries.
The plan focuses on ensuring affordable energy access by supporting tax flexibility and promoting the increased use of renewable hydrogen to reduce production costs. To prevent carbon leakage, the Commission will strengthen CBAM with anti-circumvention measures and extend its scope to downstream steel and aluminum products.
In response to global overcapacity and unfair trade practices, the Commission will introduce new long-term steel safeguards and assess the implementation of a “melted and poured rule” to reinforce fair competition. Recycling targets for steel and aluminum will also be increased, with potential trade measures on metal scrap to ensure sustainable supply.
To support industrial decarbonization, the Commission has announced a €100 billion Industrial Decarbonisation Bank, with a €1 billion pilot auction in 2025 aimed at electrification and low-carbon steel production. Additionally, the plan emphasizes the protection of 2.6 million jobs in the steel and metals industry through labor policies that support fair transitions and skills development.
“The steel industry has always been a core engine for European prosperity. With today’s Action Plan, we are offering concrete solutions for a thriving European steel industry”, stated Ursula von der Leyen, President of the European Commission.
Earlier this morning, Alexander Julius, President of EUROMETAL, was featured on BBC News to discuss the EU Steel Action Plan. He highlighted the crucial role of steel distribution and trade, the challenges posed by new trade policies, and the importance of balancing competitiveness with sustainability in the sector.
Commission’s Action Plan to secure a competitive and decarbonised steel and metals industry in Europe EU steel action plan to introduce melt and pour clause
The European Commission will introduce a “melted and poured” rule as part of its steel and metals action plan, to underpin the effectiveness of its trade defence measures.
The rule will mean the origin of goods is determined by the location at which the metal is originally melted, regardless of where it was further processed. This will prevent minimal transformation to evade dumping and other duties and provide greater clarity over the origin of the product, a draft of the plan suggests.
The move will clearly have big ramifications for steel, where material produced in countries with duties, such as China, is further processed — for example, from hot-rolled into hot-dip galvanised — before being sent to the EU without paying duties.
The commission said it will “remain vigilant, as overcapacities generated under non-market conditions may also have the effect of driving unrelated market-based producers in other third countries to export quantities to the EU that are displaced from their domestic or other traditional non-European markets”.
And the rule will have major implications for the EU’s imports of cold-rolled and hot-dip galvanised, among other products, with one trading firm saying it would be a “game changer”. European steel association Eurofer requested a melt and pour on Chinese steel as part of its request for a functional review of the steel safeguard.
The commission also will “proactively” open duty investigations based on a “threat of injury” without waiting for material injury to occur.
The carbon border adjustment mechanism will be extended to certain downstream products to prevent a shift to downstream goods that then avoid paying the carbon taxes required on upstream products, such as steel. European service centres and distributors have been requesting this move to protect themselves and their customers, which could face greater import penetration without an extension of the measures.
Source: argusmedia.com
Eurofer, industriaALL call for Steel Summit, trade action
Eurofer and industriaALL have called on the European Commission to hold a “European Steel Summit” in January to discuss short-term emergency trade measures and a new “comprehensive EU trade initiative”.
Current EU trade defence instruments remain essential but are insufficient to tackle the spill-over of global steel overcapacity, the associations say in a joint letter to Commission President Ursula von der Leyen and new Executive Vice-President for Prosperity and Industrial Strategy Stéphane Séjourné.
Around 100 million tonnes of Chinese steel are flooding major markets at dumping prices, they continue. “However, the issue is bigger than only China”, they add, with South Asia, the Middle East, India, and Japan rerouting to the EU, depressing global steel prices, and endangering the survival of the steel sector and investments in the green transition.
“Import tariffication – taking into account WTO rules – is needed to tackle a double crisis, combining market-distorting export surges with extreme low prices,” the letter seen by Kallanish states.
The proposed summit should involve the steel social partners, Member States, and high-level officials from the EU institutions, with the aim of addressing the present crisis. It would be “instrumental” in preparing the announced “Steel and Metals Action Plan”, as well as other initiatives aiming to lower energy prices, secure the effectiveness of CBAM, access to raw materials, a Just Transition, and to boost investments, such as the Clean Industrial Deal, the associations note.
“The Summit would allow the leaders of industriAll Europe and EUROFER, trade union leaders and CEOs of EU steel companies the opportunity to provide you with a detailed update on the dramatic state of play in our sector and to exchange on recommendations contained in the social partners’ ‘Steel Action Plan’,” they conclude.
Adam Smith Poland
